Interim Results
Scottish & Southern Energy PLC
07 November 2002
N E W S R E L E A S E F R O M . . . .
FOR IMMEDIATE USE Ref: NR-2211 7 November 2002
INTERIM RESULTS
for the six months to 30 September 2002
Financial
• Pre-tax profit up 7.7% to £254.7m
• Earnings per share up 5.5% to 23p
• Interim dividend up 8.2% to 10.5p per share
• £69.3m positive cash flow, before acquisitions
Operational
• Over 240,000 supply customers gained since January 2002
• £11.2m (8%) additional cost savings achieved
• First hydro-electric station refurbished under £450m renewables
programme
• Acquisition of gas storage business at Hornsea
(Note: All financial information is stated before goodwill and the impact of FRS
19 on deferred tax. Results for 2001 have been re-stated in line with FRS17)
Dr Bruce Farmer, Chairman of Scottish and Southern Energy, said: 'Scottish and
Southern Energy has delivered another six months of good financial and
operational performance, which confirms our ability to deliver solid, consistent
growth. Pre-tax profit, earnings per share and the dividend have all increased,
and we remain focused on the management of our core activities. With the highest
quality generation plant, the most efficient electricity networks and growing
customer numbers, I am confident that our focused, disciplined plans for the
future will deliver substantial shareholder value in the years ahead.'
Overview
Scottish and Southern Energy plc (SSE) produced financial and operational
results in the six months to 30 September 2002 which add to its well-established
track record of good, consistent performance.
There was a 7.7% increase in profit before tax and goodwill, with profit growth
in Power Systems and in the 'Other Businesses' segment. There was a fall in
profit before tax in Generation and Supply, reflecting in particular a more
stable environment within the New Electricity Trading Arrangements (NETA).
In the first half of the year, SSE has completed a series of actions to build
for future growth, with the achievement of a further £11.2m of cost savings,
implementation of the first phase of the £450m programme of investment in
renewable energy, an increase in the number of supply customers and the
acquisition of the gas storage business at Hornsea in East Yorkshire.
Power Systems
Operating profit in Power Systems increased by 5% to £140.4m. In Scotland,
greater income due to the mix of units distributed and a 1.9% reduction in
controllable costs more than offset the 1.3% fall in the units distributed. As a
result, operating profit rose by 2.4%.
In England, greater income was earned from an improvement in the mix of units
distributed. There was also an increase of 0.9% in the number of units
distributed and more income for the metering business. These, combined with a
reduction of 1.5% in controllable costs, resulted in an increase of 6.8% in
operating profit.
SSE's aim is to ensure the electricity network is safe and robust, able to
withstand as far as possible severe weather, and other interruption risks. In
the six months to 30 September, the average number of minutes lost per customer
was 34, down from 40 in the previous year.
Following the severe storm in the south of England on Sunday, 27 October, over
98% of SSE customers affected had their supply of electricity restored by the
following day. SSE delivered a performance unsurpassed by any of the
distribution companies dealing with the consequences of the storm.
Overall, this performance, combined with the ongoing investment made in the
electricity network, has reinforced SSE's position as the most efficient network
operator in the UK.
Generation and Supply
Operating profit in Generation and Supply fell by 6.6% to £108.1m, reflecting a
reduced contribution from trading under NETA.
In its second year, NETA has operated in a more mature manner, allowing less
scope for securing profit in the balancing market. Around £5m of total operating
profit can be attributed to SSE's effectiveness in the balancing market in the
six months to 30 September, compared with £15m in the same period last year.
Ofgem has provisionally approved the revised terms to the Nuclear Energy
Agreement (NEA), in line with the announcement on 16 July. As a result, SSE will
purchase electricity from British Energy under arrangements much more closely
linked to market prices and terms for baseload energy in England and Wales.
These changes have offset the impact of lower wholesale prices in Scotland.
Although SSE's portfolio of gas-fired power stations is the most
thermally-efficient in the UK, results in England and Wales have been affected
by low wholesale electricity prices, given that a proportion of the generation
output is sold into the wholesale, industrial and commercial markets. If
wholesale prices improve from their current levels, SSE will benefit in due
course.
Looking ahead, the £450m investment programme in renewable generation has begun,
with refurbishment work at eight hydro-electric power stations, totalling 136MW
in capacity. The second phase of the programme will begin in 2002/03, and will
cover stations at Shin, Mossford, Grudie Bridge, Quoich and Finlarig, with a
total installed capacity of around 90MW.
When refurbished, the output of these stations qualifies for Renewable
Obligation Certificates (ROCs). Electricity from the first station refurbished
under the programme was generated in September. Based on average rainfall, the
output from SSE's refurbished hydro stations qualifying for ROCs is expected to
be around 200GWh in 2002/03 and over 1,000GWh in 2003/04.
Within Supply, there were lower energy sales in the six months to 30 September,
compared with the same period last year, following the reduction in customer
numbers which occurred during 2001. The number of supply customers is, however,
now growing strongly and the impact of this growth on margins will be reflected
in results for the second half of the year.
In total, SSE has had a net gain of over 240,000 supply customers since the
start of 2002. This comprises around 160,000 customers gained as a result of
organic growth and around 80,000 customers acquired from Cambridge Gas and
Electricity on 4 November 2002, for a total consideration of around £4m.
SSE now has the fastest organic growth of any Supply business in the UK. It has
been very successful both in retaining existing and acquiring new customers. The
strategy of focusing on the portfolio of strong regional brands has been
vindicated by the addition of over 160,000 supply customers, principally in the
traditional Scottish Hydro-Electric, Southern Electric and SWALEC areas. This
includes a successful contract round in October, with a net gain of business
customers covering 11,000 sites throughout Great Britain.
SSE continues to have the lowest cost-to-serve of any energy supplier in the UK
and achieved a further 11% fall in related controllable costs in the first six
months of the year. A recent survey by JD Power confirmed that it has the joint
highest customer satisfaction amongst UK energy suppliers. SSE energy supply
customers also have special access to additional products and services, such as
those provided by the Retail business and SSE Contracting, thereby adding value
to the strength of SSE's offering to customers.
SSE Contracting, SSE Telecom and other businesses
Operating profit from other businesses, including SSE Contracting, increased by
22.5%, contributing an additional £6.3m to operating profit. At £34.3m,
operating profit from other businesses represents 12.1% of SSE's overall total.
A significant increase in operating profit was achieved in SSE Contracting,
through improved turnover and lower overheads. SSE Contracting is the UK's
largest street lighting contractor, and is part of the consortium which has
recently been appointed preferred bidder to deliver a 25-year street-lighting
contract for Stoke-on-Trent City Council.
The Connections business, which develops and operates local electricity networks
and multi-utility connections, also performed particularly well. The direct
Retail business more than doubled its sales, to over £2m. Despite difficult
market conditions, SSE Telecom remains profitable.
Gas storage: SSE Hornsea Ltd
SSE completed the purchase of Dynegy Hornsea Ltd (since renamed SSE Hornsea Ltd)
on 30 September 2002, for a total consideration of £129m plus £1.4m working
capital. The operating profit figures for the first six months do not,
therefore, include any trading results from gas storage. The acquisition is
expected to be earnings enhancing, pre and post goodwill, in the first year,
with the goodwill charge expected to be around £3m a year.
It will enable SSE to benefit from the ownership and management of a major
facility which comprises 9% of the total UK gas storage capacity. There is
substantial and ongoing demand for the facility, and its importance should
increase further as gas trading arrangements are reformed and as the UK becomes
increasingly dependent on imports of gas.
Cost Savings
SSE has already secured annualised post-merger cost savings of £145m,
significantly exceeding the original post-merger target of £90m. A revised
target of £160m was set in May 2002. Following a further reduction in
controllable costs of £11.2m in the first half of the year, representing 8% of
the overall total, the £160m target should be exceeded by the end of this
financial year.
Group Capital Expenditure
Group capital expenditure and investment, excluding the gas storage business,
totalled £114.7m during the first half of the year, compared with £137.8m in the
same period last year. This partly reflects the completion of investment
programmes in thermal generation and in the telecoms infrastructure.
In addition, while there is continued investment in strengthening the
electricity networks, in line with plans for the five-year price review period,
capital expenditure in Power Systems was lower than last year. The main increase
was in Generation, with the refurbishment work being carried out at eight
hydro-electric power stations.
Interest Charge
The net interest charge for the first six months of the year was £45m, compared
with £53.6m in the previous year. This reflects lower average debt and the
reduction of interest charges due to the repayment in March 2002 of the 10.25%
Southern Electric £150m Bond, which was replaced with lower-cost long-term
funding.
Tax
The effective underlying current tax rate was 23%, a slight increase on last
year, reflecting the lower capital spend. FRS 19 was adopted on deferred tax
liabilities in 2001/02. As these are only a potential exposure, discounting has
been applied to reflect the long-term nature of assets and this impacts on both
the profit and loss account and the balance sheet.
The headline tax charge is now 28.3%, compared with 26.1% in the same period
last year, and an additional discounted liability of £13.2m has been recognised
on the balance sheet at 30 September 2002. This reflects the increase in current
tax and a reduction in the discount rate applying to long-term liabilities.
TXU Trading
The issues arising from recent developments at TXU Europe have been
well-documented. SSE has a number of contracts with TXU Europe Energy Trading
Ltd (TXU Trading), the only material one being a 14 year contract originally
entered into in 1997. Under it, TXU Trading is contracted to purchase the
equivalent of 3.1TWh of electricity per annum from SSE at a level significantly
above the current market price.
The contract remains in operation, although TXU Trading has opened discussions
about the future of the arrangement. SSE is working to ensure those discussions
reach a satisfactory conclusion. SSE also believes it has a reasonable level of
protection in the event of TXU Trading ceasing to honour the contract. If,
however, the contract was terminated, with no recovery, the net present value
reduction, over the life of the contract, arising from its loss would be around
£175m, after tax.
In addition, TXU Trading takes 27.5% of the power from Barking Power Limited
(BPL), of which SSE owns 22.05%, at a price significantly above current market
levels. If BPL was unable to recover what it is contractually entitled to, SSE
would suffer a reduction in the earnings it receives from the investment which,
in 2001/02, amounted to £5m after tax.
Earnings per share
Earnings per share increased by 5.5% to 23p, before goodwill and the impact of
FRS19. This builds on the previous three years' performance, during which
earnings per share grew by 33%.
Dividend
The Board is declaring a half-year dividend of 10.5p per share, an increase of
8.2% on last year. This is again significantly ahead of target. SSE remains
confident it will achieve the enhanced dividend target announced in May 2002 of
at least 4% real growth for each of the years to March 2004 and sustained real
growth to March 2005.
Cash Flow and Balance Sheet
In the six months to 30 September 2002 SSE achieved a positive cash flow of
£69.3m, before the acquisition of SSE Hornsea for £129m, plus £1.4m of working
capital. The previous year's cash flow of £95m was boosted by a major reduction
in the level of energy debt following migration of all customers on to a single
IT system in 2001.
FRS 17 was adopted in full for 2001/02 for the treatment of the pension scheme
assets, liabilities and costs. At 30 September 2002, the FT-SE Index closed at
3,721. Consequently a pensions scheme liability of £188.5m is reflected in the
balance sheet.
The balance sheet remains one of the strongest in the global utility sector and
SSE continues to have an AA- credit rating. This gives SSE significant
competitive advantage in terms of cost of funding and supporting new
developments.
The underlying interest cover was almost seven times compared with almost six
times a year ago. The share buy-back programme has also continued, with the
purchase of 345,000 shares, at an average price of 589p and total cost of £2m.
Strategy and Outlook
SSE believes that effective management of core activities is the best way of
meeting its dividend targets and delivering long-term shareholder value. For
this reason it will continue to focus on building a vertically-integrated,
UK-focused energy company.
From time-to-time, as merger and acquisition opportunities arise, SSE will
pursue those that deliver value for shareholders, such as the acquisition of the
gas storage business at Hornsea. Nevertheless, SSE's ability to achieve future
growth in earnings is not dependent on merger or acquisition activity. It will
not jeopardise shareholder value by paying inflated prices for assets.
There are significant opportunities for SSE to deliver solid, sustainable
earnings growth in the years ahead in its existing generation, transmission,
distribution and supply operations, as well as in its other businesses.
Consequently, SSE is well on course to deliver its enhanced dividend targets.
- ENDS -
For further information please contact:
Scottish and Southern Energy
Alan Young - Director of Corporate Communications 0870 900 0410
Denis Kerby - Investor Relations Manager 0870 900 0410
Financial Dynamics
Andrew Dowler 020 7831 3113
Fiona Meiklejohn 020 7831 3113
There will be an analysts presentation starting at 9.30am at the offices of
Financial Dynamics, Holborn Gate, 26 Southampton Buildings, London.
Webcast facility: www.scottish-southern.co.uk
PROFIT AND LOSS ACCOUNT
For the period 1 April 2002 to 30 September 2002
Year to Note Half Year to Half Year to
31 March 2002 30 Sept. 2002 30 Sept. 2001
£m unaudited unaudited
£m restated
£m
______________ _____________________________________________ _______ __________________ __________________
4,005.6 Total group turnover 6 1,822.1 1,804.6
______________ _____________________________________________ _______ __________________ __________________
602.0 Group operating profit 246.2 241.9
Share of operating profit in:
28.8 - Joint ventures 15.7 14.4
35.7 - Associates 15.2 15.3
______________ _____________________________________________ __________________ __________________
666.5 Total operating profit 6 277.1 271.6
1.6 Income from fixed asset investments 0.4 0.4
Net interest payable:
(74.2) Group (29.7) (36.8)
(13.2) Joint ventures (6.5) (7.3)
(19.3) Associates (8.8) (9.5)
24.3 Other finance income 16.5 12.2
______________ ____________________________________________ __________________ __________________
585.7 Profit on ordinary activities before taxation 249.0 230.6
154.6 Taxation 3 70.5 60.2
______________ ____________________________________________ __________________ __________________
431.1 Profit on ordinary activities after taxation 178.5 170.4
0.5 Equity minority interests in subsidiary - 0.2
undertaking
______________ _____________________________________________ __________________ __________________
431.6 Profit attributable to ordinary shareholders 178.5 170.6
278.5 Dividends 7 90.2 83.8
______________ _____________________________________________ __________________ __________________
153.1 Retained profit 88.3 86.8
______________ _____________________________________________ __________________ __________________
50.3p Earnings per share - basic 8 20.8p 19.9p
54.7p - adjusted 8 23.0p 21.8p
50.2p - diluted 8 20.7p 19.8p
__________ __________________________________ ______________ ______________
32.4p Dividend per ordinary share 7 10.5p 9.7p
______________ __________________________________ __________________ __________________
BALANCE SHEET
At 30 September 2002
At 31 March At 30 Sept. 2002 At 30 Sept.2001
2002 unaudited unaudited
restated
£m Note £m £m
_______________ ______________________________________________________ _________________ _______________
4,057.6 Fixed assets 4,221.5 4,043.6
_______________ ______________________________________________________ _________________ _______________
Current assets
54.6 Stocks 65.2 56.5
577.0 Debtors 427.3 477.4
23.7 Investments 10.1 28.4
25.0 Cash at bank and in hand 21.9 24.4
(1,153.7) Creditors - amounts falling due within one year (1,039.0) (1,351.6)
_______________ ______________________________________________________ _________________ _______________
(473.4) Net current liabilities (514.5) (764.9)
_______________ _____________________________________________________ _________________ _______________
3,584.2 Total assets less current liabilities 3,707.0 3,278.7
(1,392.4) Creditors - amounts falling due after more than one year (1,408.2) (1,152.6)
(549.9) Provisions for liabilities and charges (575.6) (548.1)
_______________ _____________________________________________________ _________________ _______________
1,641.9 Net assets excluding pension asset/(liability) 1,723.2 1,578.0
_______________ _____________________________________________________ _________________ _______________
79.8 Pension asset 4 - 91.0
(15.4) Pension liability 4 (188.5) -
_______________ _____________________________________________________ _________________ _______________
1,706.3 Net assets including pension asset/(liability) 1,534.7 1,669.0
_______________ _____________________________________________________ _________________ _______________
430.1 Called up share capital 430.1 430.1
1,276.0 Reserves 1,104.5 1,238.4
_______________ ______________________________________________________ _________________ _______________
1,706.1 Total shareholders' funds 9 1,534.6 1,668.5
0.2 Equity minority interests in subsidiary undertaking 0.1 0.5
_______________ _____________________________________________________ _________________ _______________
1,706.3 1,534.7 1,669.0
_______________ ______________________________________________________ _________________ _______________
70.8% Gearing 82.6% 74.8%
_______________ ______________________________________________________ _________________ _______________
CASH FLOW STATEMENT
For the period 1 April 2002 to 30 September 2002
Year to Half Year to Half Year to
31 March 2002 30 Sept. 2002 30 Sept. 2001
unaudited unaudited
restated
£m Note £m £m
______________ __________________________________________________________ _____ _________________ _____________
816.6 Net cash inflow from operating activities 10 439.4 472.1
16.1 Dividends from joint ventures, associates and trade 10.5 14.1
investments
(67.7) Returns on investments and servicing of finance (28.9) (39.9)
(127.8) Taxation (64.6) (39.4)
______________ __________________________________________________________ _________________ _____________
637.2 Free cash flow 356.4 406.9
(264.8) Capital expenditure and financial investment (93.1) (141.1)
20.0 Acquisitions and disposals (130.4) -
(263.4) Equity dividends paid (194.9) (180.3)
______________ __________________________________________________________ _________________ _____________
129.0 Cash (outflow)/inflow before management of liquid resources (62.0) 85.5
and financing
7.6 Management of liquid resources 13.6 2.9
(139.6) Financing 45.3 (91.3)
______________ __________________________________________________________ _________________ _____________
(3.0) Decrease in cash in the period (3.1) (2.9)
______________ __________________________________________________________ _________________ _____________
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
For the period 1 April 2002 to 30 September 2002
Year to Half Year to Half Year to
31 March 2002 30 Sept. 2002 30 Sept. 2001
unaudited unaudited
restated
£m £m £m
________________ _______________________________________ __________________ ________________
Profit for the financial period:
410.3 Group 169.1 162.3
11.5 Joint ventures 4.5 4.9
9.8 Associates 4.9 3.4
________________ ____________________________________________________ __________________ ________________
431.6 Profit for the financial period: 178.5 170.6
(110.6) Actuarial loss recognised in respect of pension fund (260.7) (84.0)
________________ ___________________________________________________ __________________ ________________
321.0 Total recognised gains and losses relating to the (82.2) 86.6
financial period
________________ ___________________________________________________ __________________ ________________
NOTES TO THE INTERIM ACCOUNTS
1. Basis of preparation
The interim report has been prepared on the basis of accounting policies
consistent with those set out in the annual report for the year ended 31 March
2002. The financial information in this report does not constitute statutory
accounts within the meaning of Section 240 of the Companies
Act 1985. It is unaudited but has been reviewed by the auditors. Figures for the
year to 31 March 2002 included within this report are an abridged version of the
full accounts which carry an unqualified auditor's report and have been filed
with the Registrar of Companies.
2. Approval
The interim report for the six months ended 30 September 2002 was approved by
the directors on 7 November 2002.
3. Taxation
The corporation tax charge reflects the anticipated effective rate on profit
before taxation for the Group for the year ending 31 March 2003. The anticipated
effective rate for the Group for the current year, after charging deferred tax,
is 28.3% (2002: 26.1%).
4. Pensions
Financial Reporting Standard (FRS) 17 'Retirement Benefits' was adopted in full
in the accounts to the year ended 31 March 2002. This involved a significant
change to the measurement and presentation of pension scheme assets, liabilities
and costs. Under FRS 17, pension scheme assets are measured using market values.
Pension scheme liabilities are measured using the projected unit actuarial
method and are discounted at the current rate of return on a high quality
corporate bond of equivalent term and currency to the liability. Any increase in
the present value of liabilities within the Group's defined benefit pension
schemes expected to arise from employee service in the period is charged to
operating profit. The expected return on the schemes' assets and the increase
during the period in the present value of the schemes' liabilities arising from
the passage of time are included in other finance income. Actuarial gains and
losses are recognised in the consolidated statement of total recognised gains
and losses. Pension scheme surpluses, to the extent that they are considered
recoverable, or deficits are recognised in full and presented on the face of the
balance sheet net of related deferred tax.
The Group also operates a defined contribution pension scheme. The assets of the
scheme are held separately from those of the Group in an independently
administered fund. The amounts charged against the profits represent the
contributions payable to the scheme in the period.
The effect of adopting FRS 17 on the group's reported results and net assets at
30 September 2001, and the comparative movements in the period to 30 September
2002, were as follows:
Half Year to Half Year to Half Year to Half Year to
30 Sept. 2002 30 Sept. 2002 30 Sept. 2001 30 Sept. 2001
unaudited unaudited unaudited unaudited
Profit attributable to shareholders £m £m £m £m
_____________________________________________________ _______________ ______________ _____________ _______________
As previously reported - 167.1
Impact of FRS 17 - Increased charge to operating profit (8.7) (8.7)
- Increased finance income 16.5 12.2
_____________________________________________________ _______________ ______________ _____________ _______________
Net movement 7.8 3.5
______________________________________________________ _______________ ______________ _____________ _______________
As restated - 170.6
______________________________________________________ _______________ ______________ _____________ _______________
Net assets
As previously reported - 1,574.5
Impact of FRS 17 - Pension (liability)/asset (369.0) 130.0
- Deferred tax thereon 108.3 (39.0)
_____________________________________________________ _______________ ______________ _____________ _______________
Net pension (liability)/asset (260.7) 91.0
______________________________________________________ _______________ ______________ _____________ _______________
Impact of FRS 17 - Net increase in profit retained 7.8 3.5 -
_____________________________________________________ _______________ ______________ _____________ _______________
Net movement (252.9) 94.5
______________________________________________________ _______________ ______________ _____________ _______________
As restated - 1,669.0
_____________________________________________________ _______________ ______________ _____________ _______________
As a consequence of this change opening shareholders' funds at 1 April 2001 were
increased from £1,481.2m to £1,656.2m.
5. Acquisition of subsidiary undertaking
On 30 September 2002, the Group acquired 100% of the issued share capital of
Dynegy Hornsea Limited, now renamed SSE Hornsea Limited. The fair value of the
assets acquired and the final consideration paid as included in these accounts
are provisional.
6. Segmental analysis
Year to Half Year to Half Year to
31 March 2002 30 Sept. 2002 30 Sept. 2001
restated
£m £m £m
_______________ ______ _______________________________ _______________________ ________________ _______________
Turnover
243.2 Power Systems Scotland 111.8 110.3
363.8 England 176.4 169.5
_______________ _______________________________ _______________________ ________________ _______________
607.0 288.2 279.8
_______________ _______________________________ _______________________ ________________ _______________
3,430.4 Generation and Supply 1,582.8 1,578.3
_______________ _______________________________ _______________________ ________________ _______________
566.6 Other businesses 194.6 194.0
_______________ _______________________________ _______________________ ________________ _______________
4,604.0 2,065.6 2,052.1
(598.4) Less inter activity sales (243.5) (247.5)
_______________ _______________________________ _______________________ ________________ _______________
4,005.6 1,822.1 1,804.6
_______________ _______________________________ _______________________ ________________ _______________
Operating profit
117.0 Power Systems Scotland 55.1 53.8
187.1 England 85.3 79.9
_______________ _______________________________ _______________________ ________________ _______________
304.1 140.4 133.7
_______________ _______________________________ _______________________ ________________ _______________
292.1 Generation and Supply 102.4 109.9
_______________ _______________________________ _______________________ ________________ _______________
70.3 Other businesses 34.3 28.0
_______________ _______________________________ _______________________ ________________ _______________
666.5 277.1 271.6
_______________ _______________________________ _______________________ ________________ ______________
7. Dividends
The interim dividend per ordinary share of 10.5p (2001: 9.7p) will be paid on 24
March 2003 to those shareholders on the Scottish and Southern Energy plc share
register on 7 March 2003.
8. Earnings per Share
Year to Half Year to Half year to Half Year to Half year to
31 March 2002 30 Sept. 2002 30 Sept. 2001 30 Sept. 2002 30 Sept 2001
restated restated
Earnings per share Earnings Earnings Earnings per Earnings per
share share
pence £m £m pence pence
50.3 Basic 178.5 170.6 20.8 19.9
______________________ ______________ _______________ _____________ _______________ _______________
Adjusted for:
1.3 amortisation of 5.7 5.8 0.7 0.7
goodwill
3.1 deferred tax 13.2 10.2 1.5 1.2
______________________ ______________ _______________ _____________ _______________ _______________
54.7 Adjusted 197.4 186.6 23.0 21.8
______________________ ______________ _______________ _____________ _______________ _______________
50.2 Diluted 178.5 170.6 20.7 19.8
______________________ ______________ _______________ _____________ _______________ _______________
The adjusted figures are before amortisation of goodwill and the charge for
deferred tax.
The weighted average number of shares used in each calculation is as follows:
Sept. 2002 Sept. 2001
Number of shares Number of shares
(millions) (millions)
For basic and adjusted earnings per share 858.3 857.5
Effect of exercise of share options 2.2 3.5
___________________________________ _____________________ ____________________
For diluted earnings per share 860.5 861.0
__________________________________ _____________________ ____________________
9. Reconciliation of movement in equity shareholders' funds
Year to Half Year to Half Year to
31 March 2002 30 Sept. 2002 30 Sept. 2001
restated
£m £m £m
______________ __________________________________________________________ ________________ ______________
321.0 Total recognised gains and losses relating to the financial (82.2) 86.6
period
(278.5) Dividends (90.2) (83.8)
______________ __________________________________________________________ ________________ ______________
42.5 Retained (loss)/profit for the financial period (172.4) 2.8
12.6 New share capital subscribed 2.9 9.5
1.2 Premium on issue of shares to Quest - -
(1.3) Contribution to Quest - -
(5.1) Repurchase of ordinary share capital for cancellation (2.0) -
______________ __________________________________________________________ ________________ ______________
49.9 Net (reduction)/addition in shareholders' funds (171.5) 12.3
1,656.2 Opening shareholders' funds 1,706.1 1,656.2
______________ __________________________________________________________ ________________ ______________
1,706.1 Closing shareholders' funds 1,534.6 1,668.5
______________ __________________________________________________________ ________________ ______________
10. Reconciliation of operating profit to net cash flow from operating
activities
Year to Half Year to Half Year to
31 March 2002 30 Sept. 2002 30 Sept. 2001
£m £m restated
£m
______________ ______________________________________ ________________ __________________
602.0 Operating profit 246.2 241.9
19.0 FRS 17 pension charge 8.7 8.7
186.3 Depreciation, amortisation and revaluation 88.4 89.1
adjustments
11.5 Amortisation of goodwill 5.7 5.8
(15.9) Customer contributions and capital grants released (8.0) (7.8)
(18.4) (Increase) in stocks (10.1) (20.3)
95.7 Decrease in debtors 149.5 194.8
(46.9) (Decrease) in creditors (32.8) (34.7)
(15.1) (Decrease) in provisions (7.0) (3.0)
(1.6) (Profit) on disposal of tangible fixed assets (1.2) (2.4)
______________ __________________________________________________ ________________ __________________
816.6 Net cash inflow from operating activities 439.4 472.1
______________ __________________________________________________ ________________ __________________
11. Reconciliation of net cash flow to movement in net debt
Year to Half Year to Half Year to
31 March 2002 30 Sept. 2002 30 Sept. 2001
£m £m £m
_____________ _______________________________________________________________ ________________ _____________
(3.0) (Decrease) in cash in the financial period (3.1) (2.9)
147.0 Net cash (inflow)/outflow from (increase)/decrease in debt and (44.4) 100.8
lease financing
(7.6) Net cash (inflow) from (decrease) in liquid resources (13.6) (2.9)
_____________ _______________________________________________________________ ________________ _____________
136.4 Movement in net debt in the financial period (61.1) 95.0
(1,343.7) Net debt at start of financial period (1,207.3) (1,343.7)
_____________ _______________________________________________________________ ________________ _____________
(1,207.3) Net debt at end of financial period (1,268.4) (1,248.7)
_____________ _______________________________________________________________ ________________ _____________
12. Analysis of net debt
1 April 2002 Cash Flow 30 Sept. 2002
£m £m £m
_____________________________________________________ __________________ __________________ __________________
Cash at bank and in hand 25.0 (3.1) 21.9
Overdrafts (0.7) - (0.7)
Other debt due within one year (184.6) (21.4) (206.0)
_____________________________________________________ __________________ __________________ __________________
Net borrowings due within one year (160.3) (24.5) (184.8)
Net borrowings due after more than one year (1,070.7) (23.0) (1,093.7)
Current asset investments 23.7 (13.6) 10.1
_____________________________________________________ __________________ __________________ __________________
Net debt (1,207.3) (61.1) (1,268.4)
_____________________________________________________ __________________ __________________ __________________
INDEPENDENT REVIEW REPORT BY KPMG AUDIT PLC TO SCOTTISH
AND SOUTHERN ENERGY PLC
Introduction
We have been instructed by the company to review the financial information set
out above and we have read the other information contained in the interim report
and considered whether it contains any apparent misstatements or material
inconsistencies with the financial information.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors. The
directors are responsible for preparing the interim report in accordance with
the Listing Rules of the Financial Services Authority which require
that the accounting policies and presentation applied to the interim figures
should be consistent with those applied in preparing the preceding
annual accounts except where they are to be changed in the next annual accounts
in which case any changes, and the reasons for them, are to be disclosed.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999/
4: Review of interim financial information issued by the Auditing Practices
Board for use in the United Kingdom. A review consists principally of making
enquiries of group management and applying analytical procedures to the
financial information and underlying financial data and, based thereon,
assessing whether the accounting policies and presentation have been
consistently applied unless otherwise disclosed. A review is substantially less
in scope than an audit performed in accordance with Auditing Standards and
therefore provides a lower level of assurance than an audit. Accordingly we do
not express an audit opinion on the financial information.
Review conclusion
On the basis of our review, we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 September 2002.
KPMG Audit Plc
Chartered Accountants
Edinburgh
7 November 2002
This information is provided by RNS
The company news service from the London Stock Exchange
Latest directors dealings
- 13 minutes ago Elixirr International
- 21 minutes ago United Utilities Group
- 43 minutes ago QinetiQ Group
- 1 hour ago Keller Group
- 1 hour ago Oxford Biomedica